Being self-employed comes with many responsibilities, including managing your own taxes. The good news is there are numerous deductions available to help reduce your taxable income. Here are some essential self-employment deductions you shouldn’t overlook:
1. Home Office Deduction
If you use a portion of your home exclusively for business, you can deduct expenses related to that space. This includes rent, mortgage interest, utilities, and maintenance. The simplified option allows a standard deduction of $5 per square foot, up to 300 square feet.
2. Internet and Phone Bills
A portion of your internet and phone expenses can be deducted if they are used for business purposes. Keep detailed records to determine the percentage of business use.
3. Health Insurance Premiums
Self-employed individuals can deduct health insurance premiums for themselves, their spouses, and dependents. This deduction applies even if you don’t itemize your deductions.
4. Business Travel Expenses
Travel expenses for business purposes, such as transportation, lodging, and meals, are deductible. Ensure to keep all receipts and a detailed log of your business trips.
5. Equipment and Supplies
The cost of business-related equipment and supplies, such as computers, software, and office supplies, can be deducted. Consider the Section 179 deduction, which allows you to deduct the full cost of qualifying equipment in the year it’s purchased.
6. Professional Services
Fees paid to accountants, lawyers, and consultants for business purposes are deductible. Keep all invoices and records of these expenses.
By taking advantage of these self-employment tax deductions, you can significantly reduce your taxable income and keep more of your earnings. At Tax Practitioner Office Of Ahmed Sharif, we specialize in helping self-employed individuals maximize their tax benefits. Contact us today to learn more about our tax planning and preparation services.
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